Price Transparency in Specialist Markets

The market for non‐GP specialist services in Australia is characterised by widely dispersed fees and out‐ of‐ pocket costs, creating uncertainty about the price patients will have to pay. This is primarily driven by doctor‐level variation in pricing rather than patient characteristics, clinical risk or quality, which reflects a referral‐based market with severe information asymmetry and weak price competition. A response to help patients navigate this system has been the promotion of fee transparency websites. While this is a welcome step to empower patients, evidence suggests such tools have limited impact and may increase prices in concentrated markets. We argue that to improve transparency tools, risk‐adjusted information on expected costs and quality indicators must be provided and this information should be targeted at the referee, often the general practitioner.